After over a year of anticipation, the Dangote Refinery has officially commenced the production of Premium Motor Spirit (PMS), commonly known as petrol, from its 650,000 barrels per day facility in Lagos. This marks a significant milestone in Nigeria’s quest for energy self-sufficiency.
At a press conference, Aliko Dangote, the refinery's owner, and Africa's wealthiest businessman, celebrated the launch as a pivotal moment for the nation. “It’s a celebration day for Nigerians,” Dangote declared. He emphasized that the new petrol would meet international quality standards, promising improved vehicle performance and longevity. “Our quality will match that of anywhere in the world, including the U.S.,” Dangote asserted.
The refinery’s full capacity of 650,000 barrels per day is expected to be operational by year-end. Dangote highlighted the refinery’s potential to boost local industry and manufacturing by reducing reliance on imported fuels. “We will help restore industry and manufacturing, save foreign exchange, stabilize the naira, and help lower inflation and the cost of living,” he said.
Since beginning operations in December 2023, the $20 billion facility has already been supplying diesel and aviation fuel. The commencement of petrol production comes amid ongoing fuel shortages in Nigeria, exacerbated by a reported $6 billion debt owed by the Nigerian National Petroleum Company Limited (NNPCL) to fuel suppliers.
Nigeria's energy sector has faced significant challenges, with state-owned refineries remaining non-operational. The country has relied heavily on imported refined petroleum products, with fuel queues and soaring petrol prices reflecting the sector’s struggles. Following the subsidy removal in May 2023, petrol prices have surged from approximately ₦200 to ₦800 per liter, straining consumers.
The Dangote Refinery’s entry into the market is expected to provide much-needed relief. According to reports, Nigeria consumes around 35 million liters of petrol daily, while Dangote’s refinery is projected to produce up to 100 million liters per day. The new refinery’s output is anticipated to reduce the country’s dependence on imports and help stabilize local fuel prices.
The refinery’s progress follows earlier delays and regulatory hurdles, with recent interventions by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and support from the Federal Executive Council facilitating its operations. The refinery is now poised to significantly impact both domestic and regional fuel markets.
In related developments, the Organization of Petroleum Exporting Countries (OPEC) reported a decrease in oil output in August, driven by unrest in Libya and ongoing supply cuts by member states. Nigeria’s increased production, including from Dangote’s facility, is expected to impact regional oil trade and potentially ease global fuel market pressures.
